How Apple Makes the World a Better Place

What the world needs now isn’t love, sweet love. It needs more companies like Apple.

Critics slam Apple for not giving more to charity. It’s a reasonable complaint. Apple should be more philanthropic. Under Tim Cook they probably will be.

However, Apple helps the world in a far more profound way than some annual contribution to United Way.

Apple represents an approach to business that “lifts all boats,” to quote a well known cliche.

Apple is the global economy’s single most powerful economic force opposing a great death spiral in which margins are squeezed, goods get shoddier, people make less money and our lives just get cheaper in every way.

Here’s how Apple does it.

Huge discount stores like Walmart are at the forefront of a global cheapening. As Walmart bulldozes mom-and-pop retail stores and erect massive new super stores, that company gains control over how manufacturing companies do business. They squeeze every drop out of the companies that make products of every description, forcing them to cut corners, lay off or offshore workers and seek out lower quality materials. Because everyone is either unemployed or making less money, they can’t afford to shop anywhere except stores like Walmart. This is the opposite of Henry Ford’s strategy, which was to pay workers so much they could afford to buy his cars.

The self-reinforcing economic death spiral continues until society resembles The Hunger Games, where the majority live as virtual serfs in District 12 shantytowns and a minority live in obscene luxury and leisure in gleeming, high-tech cities.

Internet powerhouses like Google do the electronic equivalent. Instead of paying a company like Microsoft for an office suite, Google wants you to use Google Docs free, or at a very, very low price. Instead of paying a fair price for a newspaper subscription, which employs reporters, editors, ad sales people, truck drivers, press operators, ink makers, lumberjacks and others, Google has us reading news free online. Journalists are forced to become conflict-of-interest entrepreneurs or homeless alcoholics, while the journalism is done by unpaid or underpaid semi-amateur bloggers.

It’s unfair of me to single out Walmart and Google. There are thousands of companies aggressively pursuing the cheapening of everything. And companies are merely responding to the public’s impulse to want more stuff rather than better stuff, more food rather than better food, more content rather than better content. People think they want cheap stuff. But nobody wants to live in the world that results from cheapness as the driving economic force for change.

And yet Apple stands in stark contrast to this trend. Apple sells super high-quality products and services at reasonable but profitable prices. More importantly, they don’t make their money by forcing other people to make less, contrary to reputation. In fact, people and companies who participate in the whole Apple iCosystem tend to make much better livings than people contributing to alternative platforms.

Apple is holding back the tide of cheapification, and represents an alternative future in which the following might happen:

Book authors, editors and publishers can make a living

The current leader in eBooks is Amazon.com, which uses what’s called a “wholesale model” for selling books. That means Amazon is in control of the price it charges for books, not publishers. Amazon often sells eBooks for less than the wholesale price it paid for them, losing money on the deal. By undercutting other sellers, Amazon has made itself the top seller of eBooks, which enables Amazon to force publishers to lower their wholesale price. It also forces competitors to slash prices, too.

As a result, it has become almost impossible to make a living writing eBooks. There’s just no money in it — unless you have a TV show like Bill O’Reilly or Snooki. Because great authors tend not to have TV shows, they have to find other ways to make a living.

Everyone in the book industry suffers. Agents have to find other work. Editors get laid off (and books don’t get edited well). The whole process of discovering new writing talent is broken. Nobody is making any money and the quality of books is suffering.

Apple, on the other hand, is actually being sued by the Department of Justice (DoJ) for using what’s called the agency model. Under Apple’s system, publishers can charge whatever they like for books, as long as Apple (the “agent”) gets its percentage. The DoJ is concerned because, in order for the agency model to work, Apple requires that publishers sell at the same price or more when selling the same titles through other “agents.”

The government calls this “price fixing.” Publishers call this “saving the publishing industry.” Under Apple’s model, but not Amazon’s, publishers can afford to pay writers and editors.

Apple’s model represents a future where books are well written and well edited, a future where publishing professionals can make a living.

Factory workers live better lives

It’s fashionable to diss Apple for abusing Chinese factory workers. And recently, Apple has instituted a series of “reforms” that pay workers more and gives them better working and living conditions.

But even before these reforms, the factories contracted by Apple were among the best places to work in China. Much of the outrage about Apple’s factories requires an almost perfect ignorance of the conditions of factories nationwide in China. Foxconn is a worker’s paradise compared with the miserable sweatshop conditions under which the vast majority of Chinese factory workers labor.

The existing relative superiority of these factory conditions combined with the new reforms are so revolutionary that it may case a ripple effect of humane working conditions throughout China. Building Apple products in China will become so desirable that workers at other factories are expected to quit and try to work at Foxconn and the like. As a result, those other factories will have to pay more and improve conditions in order to compete in the labor market against Apple’s contracted factories.

Apple’s ecosystem represents a world in which software developers can make a real living selling mobile apps.

Retail areas thrive

Companies like Amazon.com and thousands of other online retailers provide a compelling alternative to brick-and-mortar retail shops. Which is great — unless you want to imagine towns and cities with boarded up shops, tumbleweeds and packs of wild dogs roaming a post-apocalyptic formerly retail landscape. Like Greece.

BestBuy, the latest retail casualty, recently announced that it’s closing 50 stores and laying off 400 workers, for example.

Yet Apple has developed a highly profitable retail-store system that attracts customers to downtown areas and malls, beautifies every neighborhood it’s in, restores historical venues like Grand Central Terminal in New York City and employs thousands.

The Apple ecosystem represents a future in which downtown areas are bustling gathering places of shopping, dining and entertainment, a cure for urban decay and blight.

Consumers and investors have more confidence

We live in a perception-based economy, where the beliefs and attitudes held by investors and consumers can make or break an economy.

Apple is so successful that it actually boosts confidence single-handedly.

One leading yardstick of how the economy is doing is the S&P 500, which is Standard & Poor’s report on the top 500 companies and how they’re doing with their collective stock performance.

The most recent report showed that earnings-per-share grew by 13% in the fourth quarter. Which is pretty good coming out of a recession, a real confidence booster.

Apple represents a world of consumer and investor confidence in the economy.

These are just a few examples that show Apple’s whole business model, its general way of doing business is really good for the economy — and would be great for the economy if other companies follow Apple’s lead. And not just in small, superficial or temporary ways. But in the biggest of possible ways: What kind of world will we live in?

Will we live in the Walmart, Google and Amazon world of scorched-earth policies that make everything shoddy and everyone poor? Or will we live in the Apple world in which high quality prices command reasonably priced products that enable everyone involved to make a good living?

Yes, Apple should give more to charity. But nothing it can give will be as valuable as Apple’s powerful contributions to high-quality products, living wages, thriving retail spaces and a robust economy.

About the author:

Mike Elgan writes about technology and culture for a wide variety of publications. Follow Mike on Google+, Facebook and Twitter.

Erik Maier

This has nothing to do with this article, but this new commenting system is god awful. Why the change? This is a mess.

VGISoftware

Mike, you need to pull yourself up from the very ranks of “bloggers” you describe by proofreading your writing before you post. Are you content to overlook with so many others your own misuse of “it’s”, for example?

I disagree with giving more to charity. Apple is already doing it share to “give back” by way of not only all the points you mention, but, more fundamentally by simply being a “good corporate citizen.” Has there EVER been a large corporation like it?. . . I give up. There are of course many “good citizen” corporations, but I think few which can maintain their respective integrities like Apple has in the face of staggering growth.

Steffen Jobbs

It’s become very fashionable for certain people in America to disrespect and hate Apple for any reason although it is an American company. Apple builds some of the very best consumer products by far so the critics and detractors have to pore over every product Apple makes and try to find reasons to fault their products because they’re not perfect in every way. When it comes to labor practices in China, even though many companies use Foxconn labor, the iHaters had to take the time to single out Apple as the worst offender of all the companies having products built at Foxconn. Not Dell or H-P or Samsun, but the do-gooders targeted Apple as the lone guilty party that is causing suicides and terrible working conditions.

The do-gooders are also targeting Apple because Apple has products assembled in China instead of America. This despite the fact that nearly all American tech companies have their products assembled in China and Apple did not start this practice. Certain people just love to blame Apple for all the ills in the current tech-based society and the loss of jobs in America. Those jackasses can easily target any major company and not just lump everything under being Apple’s fault. There are so many consumers enjoying Apple products and yet there are just as many iHaters that despise Apple for so many illogical reasons like saying the company is too successful or is making too much money or is making Chinese factory employees work too hard. What kind of idiotic reasons are those?

I suppose extreme success brings about extreme jealousy and hate. Too bad. Apple has made its money by letting consumers freely choose what products they want to buy, but I guess that’s a crime in some people’s eyes.

emoraz

So… the idolatry of the Apple fanatics got to this point? To say that the company makes the world a better place? All right chief… I like Apple products and, my entire respects. But I pass with that one. Excuse me, please…

aardman

I don’t know Steve Jobs from Adam, or anyone who works at Apple for that matter, but I will forever feel a debt to the company because Apple stock, singlehandedly, prevented my retirement savings from being decimated by the great recession. While people I know were losing sleep and falling into despair as they watch their comfortable retirement disappear before their very eyes, my savings were actually climbing. Nobody utters a bad word about Apple and Steve Jobs in my house without hearing an earful from me.

krist0ph3r

the device is the platform, and the content (apps/services etc) is what actually makes it useful.

apple makes consumers pay more for the platform, google makes the platform cheap/free, and make businesses that stand to make a profit out of advertising pay. also, businesses save on costs by getting more efficient advertising anyway.

i don’t see any downside to google/samsung/other cost focused companies’ approach. and on the upside, they have now brought cheap smart devices to a whole lot of people who can’t afford iDevices. smartphone penetration may have increased some fair percentage in the US, but it has exploded from almost nothing to a significant chunk in “developing” countries. and even non-smartphones that cost under 30$ are now internet enabled.

sweeneydavidf

Good lord, I actually agree with an entire Mike Elgan article. Good work this time, Mike.

alfordsteven

Interesting, but I assume Cult of Mac is also cutting out an important journalistic component–editors:

The existing relative superiority of these factory conditions combined with the new reforms are so revolutionary that it may case a ripple effect of humane working conditions throughout China. [singluar pronoun; plural antecedent]

it’s general way of doing business is really good for the economy. [it is general way of business?]

Will we live in the Walmart, Google and Amazon world of scorched-earth policies that make everything shoddy and everyone poor? [policies make products. Hmmm.]

Or will we live in the Apple world in which high quality prices command reasonably priced [What is a high quality price? Aren’t products high quality?]

Photocyborg

Hah, look I believe most of this. but to say other factories in China will have to compete and up their working standard to keep their people from moving to Foxxcon is ludicrous.

There are enough workers in China to fill the space any worker creates by moving to Foxxcon or any Apple factories. Those other factories don’t have to do a damn thing to pack their production lines to output products at max capacity.

tHeSmUrF

When I read this post I thought “good one, had me fooled for a moment”, then I scrolled back up and checked the post date…nope not April fools day. What a pile of dribble

“In fact, people and companies who participate in the whole Apple iCosystem tend to make much better livings than people contributing to alternative platforms.”

WTF? Now your just trolling.

tHeSmUrF

When I read this post I thought “good one, had me fooled for a moment”, then I scrolled back up and checked the post date…nope not April fools day. While some of it is true, other bits are nothing but Apple loving dribble.

“In fact, people and companies who participate in the whole Apple iCosystem tend to make much better livings than people contributing to alternative platforms.”

Now your just trolling.

JHendrix

While Mike’s tech Utopian vision is very enticing, I seriously doubt the end result will be as Mike envisioned here even though if all the tech big boys followed the Apple business model. To be more direct, the view is simply naive.

Also, there is no excuse for not giving more to charity especially with the amount of cash Apple is sitting on. “Apple’s powerful contributions to high-quality products, living wages, thriving retail spaces and a robust economy” simply doesn’t help those who need help from charities in any meaningful ways.